Michigan film industry reels at Gov. Rick Snyder's budget proposal

LANSING (AP) -- Michigan film producers and some lawmakers say they will lobby to maintain the state's $50 million film credits cap, which could be slashed 50 percent under Republican Gov. Rick Snyder's budget proposal.

Senate Majority Leader Randy Richardville, a fellow Republican, said the reduction is "too drastic" and would devastate workers in the film industry.

Film producers applauded an increase in the film credits cap in the budget passed by lawmakers last year, after incentives were scaled back dramatically in Snyder's first year in office as part of his plan to balance the budget. But maintaining the higher cap may be a difficult sell with Snyder, who views the incentives as subsidies that take money away from vital programs like education and public safety.

Snyder inherited one of the most generous film incentive programs in the country from former Democratic Gov. Jennifer Granholm. Under that program, the state refunded 40 percent to 42 percent of a production company's qualified expenses,Äî with no limit to how much could be awarded,Äî giving way to what some called a golden age of Michigan filmmaking.

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Film expenditures increased from $125 million to an estimated $223.6 million between 2008 and 2009 as big-name Hollywood production companies brought films like "Gran Torino" and "Up in the Air" to Michigan.

Snyder put an end to the unlimited refundable tax credits his first year in office and capped the total amount the state would pay each year at $25 million, the same amount proposed this year. But that was doubled to $50 million during budget negotiations last year because of aggressive lobbying by filmmakers, with the support of Richardville.

Producers applauded the boost in film incentives, viewing it as a small step forward for an industry that they say has taken a significant hit since Snyder took office.

Since Snyder's plan has been put in place, interest from the industry has waned. The Michigan Film Office approved 24 projects for incentives in 2011, compared to 62 approved in 2009.

Now, producers say, they feel the rug is being pulled out from underneath them just as the industry was starting to show signs of life again.

Hopwood DePree opened TicTock Studios Holland in 2005. He said he understands "the state is in very challenging times" but "consistency is key" in the film industry.

"If we are going up and down ... it just makes the state look unsure of itself and it doesn't bode well for any industry," he said.

Mark Adler, director of the Michigan Production Alliance, said producers are already planning for next year and Snyder's proposal for $25 million "alone scares people away."

Michelle Begnoche, spokeswoman for the Michigan Film Office, said they expect to use up the $50 million in credits this year. This week, the office awarded $7.5 million in incentives for "Low Winter Sun," a new AMC drama set in Detroit.

The film industry has some influential lawmakers on its side who may be able to convince the legislature to maintain the current incentive cap. Richardville said he will ask Snyder to reinstate the $50 million cap, and even discuss ways to increase the amount in the next few years.

Bob McCann, spokesman for Senate Democratic Leader Gretchen Whitmer, said she is concerned about lowering the cap "because it was really starting to pay dividends in Michigan." He said it will be difficult to get producers to "trust Michigan again and invest here when the bar is constantly being changed on them."

The Snyder administration says it has been clear on film incentives. Kurt Weiss, spokesman for the governor, said Snyder believes the "entertainment industry is a viable industry but that film incentives are not the right approach."

DePree said the administration must decide if it wants the film industry in the state and take steps to either cultivate it or get rid of it.